All New York employers, especially, New York City employers, should be aware of two proposed labor law changes that will impact their business. First, the New York Department of Labor has proposed increases to the minimum salary threshold that must be paid to employees in order for such employees to be exempt from overtime. These minimum salary thresholds are different from the changes to the federal minimal salary thresholds that are to go into effect on December 1. Second, the New York City Council has passed – and Mayor de Blasio is expected to sign – legislation that would regulate how New York City businesses can use "freelancers."
New York Minimum Salary for Exempt Employees On Track To Surpass Federal Standard
As detailed in a previous alert, starting on December 1, 2016, the federal minimum salary level to classify employees as exempt from overtime will increase from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). It is imperative for employers to finalize all exemption analysis by that date.
New York employers, however, may soon face a higher salary threshold than the newly increased federal standard to properly pay executive, administrative and other exempt employees a flat salary. The proposed modifications, which will almost certainly go into effect, set the minimum salary levels for exempt status at 75 times New York State's minimum wage. Additionally, the salary levels will increase proportionally over the years as the state increases the minimum hourly wage. Under the new proposed Wage Orders, New York City employers with more than 10 employees will see the minimum salary requirement surpass the federal standard on December 31, 2017. The charts below summarize the minimum salaries that employers will have to pay exempt employees:
New York City Large Employers (11 or More
Employees):
$825.00 per week on and after December 31, 2016
$975.00 per week on and after December 31, 2017
$1,125.00 per week on and after December 31, 2018
New York City Small Employers (10 or Fewer
Employees):
$787.50 per week on and after December 31, 2016
$900.00 per week on and after December 31, 2017
$1,012.50 per week on and after December 31, 2018
$1,125.00 per week on and after December 31, 2019
Remainder of Downstate (Nassau, Suffolk and
Westchester Counties):
$750.00 per week on and after December 31, 2016
$825.00 per week on and after December 31, 2017
$900.00 per week on and after December 31, 2018
$975.00 per week on and after December 31, 2019
$1,050.00 per week on and after December 31, 2020
$1,125.00 per week on and after December 31, 2021
Remainder of the State (Outside of New York City,
Nassau, Suffolk and Westchester Counties):
$727.50 per week on and after December 31, 2016
$780.00 per week on and after December 31, 2017
$832.00 per week on and after December 31, 2018
$885.00 per week on and after December 31, 2019
$937.50 per week on and after December 31, 2020
Please also note that employees must still meet strict "duties" requirements governing exempt employees in order to legally pay a salary and avoid overtime claims. Again, it is important to note that under the Hospitality Wage Order in particular, employees may not be paid on a salary (or shift) basis unless they meet the rigid exemption rules. In addition to the minimum salary increases, there are also proposed increases to uniform allowances, tip credits and meal credits as outlined below.
Uniform Allowance
When an employer does not launder or maintain required employee uniforms, employers must pay the weekly allowances listed below in addition to the employee's regular wage, based on the number of hours worked per week. The High Rate applies to employees who work more than 30 hours per week, the Medium Rate applies to employees who work more than 20 but less than 30 hours per week and the Low Rate applies to employees who work 20 hours or less per week.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
